By Peter Peard, CEO, Peard Real Estate Group
There is an old saying that the best time to buy straw hats for summer is in winter and the same theory applies to the property market.
The best time to purchase real estate is not during a boom, but now, while the market is facing some challenges. Buyer sentiment in the Perth property market is currently very low and with a large number of competitively priced properties to choose from, now could be a great time to purchase an investment property in a great location.
First time investors should focus on affordable areas close to the coast which are well established and will appeal to renters. Ex rental properties that are "tired" offer first time investors a great opportunity as these properties are generally overlooked by other buyers.
I believe there are some great buying opportunities in second tier coastal suburbs especially along the northern coastal strip. These second tier suburbs include Greenwood, Heathridge, Beldon, Craigie, Padbury and Clarkson.
Astute property buyers should be targeting established homes in these suburbs that may need some minor renovations.
In a subdued property market, homes that are poorly presented tend to be over penalised in price even though they may only require cosmetic renovations such as new paint or carpets.
For an investment of a few thousand dollars, these homes in well located areas can be brought up to a level which will appeal to tenants and boost rental returns in the short term.
Over the long term, the location of the home will deliver capital growth if located close to the ocean and railway stations such as Beldon or Heathridge.
The overall forecast for the Perth property market looks subdued with the market effectively bouncing along the bottom of the current property cycle.
There is still an oversupply of homes in Perth due to the recent building boom and this will take at least another year for the market to absorb.
On the positive side, the State economy is holding up better than people expected with the unemployment rate at around 6% which is the national average.
As long as unemployment remains under control, then there will be no blow out in distressed sales with sellers being forced to reduce their property prices.
Looking to the future, investors should look for steady rates of capital growth in a low risk environment.
Unlike Sydney or Melbourne, Perth is at the bottom of its property cycle so there are fewer risks in buying an investment property in Perth compared to these over priced Eastern capital cities.